In a corporation, the Board of Directors is the most important decision-making body. A company’s Board of Directors represents its shareholders and advises the CEO as and when needed. Every member of the board should be selected for his or her experience, integrity, and demonstrated performance in fields related to the company’s prospective success. It is expected that the board be comprised of individuals, who are qualified to build internal trust and act quickly and decisively when necessary. This remains true whether or not the board is diverse, but it raises interesting questions as to the balance between experiential backgrounds and diversity that should inform member selection.

It is my belief that the boards best suited to represent companies are those that demonstrate maximum diversity. While it is important that synergy and internal trust not be sacrificed, as both are necessary for making swift decisions, I would argue that only through diversity can a board provide comprehensive insight. The modern company faces a growing challenge of an increasingly competitive and globalized economy, and there is an insistence on the part of customers, who come from all walks of life, that the board be a reflection of their diverse backgrounds, outlooks, and cultures.

However, we are left to ask the question: what does diversity really mean? Some define diversity in terms of ethnicity, gender, or age, while others may want to approach it from a different angle, considering a diversity of skills, competencies, experiences, and interests. Regardless of one’s definition, it is a proven fact that by creating true stratification within a board and by including as many different voices as is possible, one creates a greater opportunity for open discussions, disagreements in perspective, and a more aggressive and productive flow of thought. This makes it possible for an organization to anticipate the “unthinkable.” As the board’s scope broadens, the organization becomes better equipped to optimize their business planning and strategy execution.

Several studies have already proven that this diversity has resulted in real value for both companies and shareholders, alike.

GENDER DIVERSITY

One area where we are seeing great progress in the boardroom is in the representation of women. As a greater number of women enter the C-suite, the members of which comprise the pool of board-eligible candidates, it is unsurprising to see their participation increase accordingly. It would be incorrect, however, to conclude that it has been an easy task for women to obtain and maintain their place in the boardroom. In fact, they have in the past been and continue to be subject to outcast treatment, stereotypes and assumptions about their qualifications.

According to statistics by Ernst and Young, companies that have women in board and executive leadership roles are more likely to have added new directors in recent years, while their predominantly-male counterparts remain more stagnant; only 57% of companies fitting the latter description have added a new director in the past three years, versus 82% of companies with at least one female director, while over a five year period, those rise to 77% and 94%, respectively.

Across the globe and across all avenues for change, efforts are being put towards increase board diversity. The necessity for higher gender equality in the boardroom is greater than ever before, and most directors acknowledge the value of this type of board diversity.

DIVERSITY & INCLUSION ARE NOT JUST MORALLY JUSTIFIED – THEY ARE VITAL TO COMPANY SUCCESS

Gender is only one of many factors that can contribute to the perspective that a director brings to the boardroom. While gender diversity represents a critical step in the right direction, we have seen that boards profit by nominating committees that provide a more dynamic and multidimensional view, which comes with optimal diversity. By creating a more eclectic group of company leaders with a wider range of perspectives, experience and knowledge, the company puts itself in a better position to fully represent its investors, clients, and the society in which it operates. It is essential to have directors from different backgrounds and experience of tackling risks from varied angles so that they are able to perceive the unforeseen and deal with the unexpected risks and challenges.

The nominating committees can adopt several means of measuring and recruiting perspective candidates that would help optimize their strategy formation in a way that would allow for multiple views on possible outcomes to emerge and best inform the boards’ decision making process:

Ascertain the requirements, priorities and perceptivities, and institute a process for screening for these qualities

Conduct a gap analysis of the board that considers that full range of attributes.

Emphasize effective communication skills and interpersonal acumen.

Delve a little deeper into the substantial pool of developing talent immediately below C-Suite level in order to cast a wider net.

Ensure a thorough director evaluation process to maintain the touchstone.

A diverse boardroom reflects the real world because a company’s clients and customers come from diverse backgrounds. This makes the company more knowledgeable and sensitive towards a wider variety of groups. A Counsel constituted of a variety of authorities is considered sensible as it sets an example for the subsequent levels in an organization. The larger the variation, the higher the popularity, and the greater the reputation and branding!

Diversity is directly related to a firm’s overall improved performance; especially financially as it strengthens the decision making body. Several companies do not let their own people move forward. Instead, they hold them back by ignoring the prerequisites. Sadly, only a few companies genuinely understand the relationship between employee morale, cultural and emotional sensitivity and talent. Sub-consciously, the talent pool is being narrowed down.

Boards have to acknowledge talent and to look beyond the line to find the best candidates within their organization or outside of it. It does not matter where the talent comes from or what gender, race, or socioeconomic class defines its roots– what is important is that the organization recognizes it and harnesses it to formulate new possibilities and explore new horizons.

In conclusion – Diversity is not deviant; in fact, if implemented properly, it will nearly always result in a positive impact.

Rajeev Gupta is a serial entrepreneur who has experience in SaaS, product launch and operations, and startups. He has consulted with a wide range of companies in multiple verticals on technology, sales, marketing, and accounting implementations, mainly using clout technologies. He currently serves as the founder and CEO of DBSync, a company offering an integration platform as a service. He is also the CTO of Avankia, LLC, a Software as a Service (SaaS) and technology-consulting company, listed on the “Inc. 500” list of America’s 500-fastest growing private companies.

In 2009 I took on the challenge to be the President and CEO of Supervalu. At the time, Supervalu was one of the largest supermarket operators in the United States. The company had to grown to 1400 stores through a series of acquisitions.

While all stores were supermarkets, they were in fact a collection of 10 very unique brands that had at one point in their not too recent history been independently owned and operated brands. Most of the acquired companies were still using legacy IT systems.

As anyone who has had the experience of integrating acquired businesses surely knows, gaining synergies and integrating cultures are huge challenges. I found that the use of a great social media tool greatly accelerated the process of growing sales programs and spreading the corporate culture. At Supervalu, we used a third party program: Yammer. Yammer was founded in 2008 by David Sacks with the goal of dramatically improving the way people collaborate in business (Yammer was sold to Microsoft in 2012).

Listed below are the 5 key reasons why I believe any business should be utilizing some form of enterprise social software now:

1. Connect the disconnected: At Supervalu, the store manager is the front line leader charged with meeting the local customer needs. We had introduced a new “hyper-local” strategy in 2010. Our goal was to be the best supermarket in any given neighborhood by having the food products that the people in that neighborhood needed. The challenge was getting the information from stores to home office and back again in anything like a timely manner. Social media messages are instant, multi media, and can be directed at groups or individuals.

2. Exploit best practices: We rather quickly found an unexpected benefit (and it was huge): there were clusters of stores all over the country serving similar customer groups, however, these stores had no way of knowing where the other stores were. The first example of this was our college store group. All over the country we had stores serving college communities, yet not a one of these stores had any way to communicate with the others (or even of knowing that they existed). One of our mangers in Southern California decided to start a “college store” group on Yammer. Before long, we had over 100 stores from across the county join this group. Without any direction or help from the home office, these stores began to share best practices with one another (my favorite: merchandising ping pong balls by the beer department).

3. Get unfiltered, Instant feedback: A good social media portal gives you real-time, direct feedback. I wrote a blog each Saturday that I posted for all of our managers to see. As soon as hit the upload tab, I would know that somewhere out there this post was being read (most likely on a manager’s IPad or smart phone). Managers had the ability to comment on any post (including mine). We had only a few rules: all post and comments had to be professional (no trash talk); work related (personal stuff goes on Facebook); and relevant.

4. Empower front-line management: Our goal of being a great local grocer meant that we had to radically change some rules and procedures. In the past, if a customer requested that a store carry a local item, the approval process took a minimum of 8 weeks! Of course, in 8 weeks the customer had long ago moved on to another grocer. By changing rules and utilizing the social platform, the time from customer request to actually getting the item in the store was reduced to just a few days.

5. Speed innovation: I really like this one….all of a sudden we were able to tap in to the talent and innovation of hundreds of people. There were store managers in remote towns who seldom saw anyone from the home office who were now able to share their ideas with anyone. Once we found good ideas (we were ambivalent as to where the idea came from), it was much easier and faster to roll this idea out to all of the relevant stores.

]]>By Philip Black, former founder and serial CEO of high-tech companies, now serving as an independent board member.

There has recently been a healthy trend to include more “independent” directors on company boards. Wall Street reforms kicked off an awareness of the need for improved corporate governance. The subsequent trend and has lead to boards looking for, and recruiting more ”independent” directors – directors who are not affiliated with any particular shareholder group, and who bring significant board, industry and management experience. This trend has resulted in boards having considerably improved quality and effectiveness, as measured by various industry reports.

Having spent the last 30 years serving on many high-tech boards, both public and private, and with 35 years of experience as a CEO, I’d like to talk more about the real benefits of having a professional, independent director on a board. I’ve seen it from both sides.

First, there is the key aspect of corporate governance. Independent directors, particularly those who have extensive board experience and ongoing board education, can spot the key legal and governance issues early. They can provide the stimulus for the required debate and due diligence that should accompany any meaningful board topic. Too often, issues are ”presumed” to be good for the company, do not get a healthy debate, and are passed by a quick show of hands. A meaningful debate, even when there is a unanimous desire to approve the issue, can protect against board liability further down the road. Put another way, a thoughtful discussion on any issue provides legal coverage that is absent if items are just quickly pushed through the board with little or no debate.

Then, there is industry knowledge and management experience. Independent board members can bring both industry knowledge and management experience to a board that otherwise features investors and shareholders who, while excellent at investing, may not have the management experience or specific industry knowledge to challenge management’s assumptions. This can be particularly important when discussions with management require a second opinion on key operational points, including executive compensation.

Next, factor in the benefit of an unbiased opinion. Independent board members can and should present opinions that are not tied to the interests of management or any shareholder group They can also bring views that may be politically difficult for other directors to discuss, given ties to shareholder groups or management.

Finally, there’s the huge benefit of constructive mediation. Too often, there are different and conflicting interests around the boardroom table. A good independent director can and should be a powerful force for mediation, brokering compromises between shareholder groups, and resolving the different views between management and the board that inevitable occur. The result is a board that can make progress without acrimony.

In conclusion, both public and private boards can benefit from experienced independent directors. Such directors should have extensive management experience, significant board experience, and ideally have participated in ongoing board education programs. Equally important are people skills and “chemistry” – a good independent director should have a professional demeanor and, at the same time, have the personality to be able to build positive business relationships with other board members and management.

Investors and your board of directors have access to a lot of data – annual reports, earnings releases, proxies and 8K updates; however these figures do not adequately depict the strategic progress or the comprehensive financial story of your company. How you communicate your company’s story should be simple which will make it very effective.

Three keys to effective communication which I have learned over my years of serving as a CFO and CEO of several publically traded companies are:

Brand your company for the right audience

Keep your message clear and simple (Do not surprise or confuse)

Be repetitious and consistent

Your investors and potential investors do not need you to understand the financial numbers. They have their models and their metrics and are well trained to digest the details of your GAAP statements. So your job, assuming your numbers are acceptable, is to take them beyond the numbers and give them a compelling reason to want to support and invest in your company to ensure you maximize your enterprise value.

I believe the best way to garner this investor and board support is to brand your company. Brand management requires you to think about the image and the feeling you want your audience to have when they think of your company. It requires analysis and planning of who is your targeted audience, how and when you will engage them and most importantly how you will build a personal relationship with your investors and board members. I am not talking about developing golfing buddies but having the investors and board get to know your CEO well enough through his/her proven track record, so that they trust his/her ability to strategically guide your company toward its financial goals for this year and into the future.

Brand your company for the right audience

Part of effective, successful communication with your investors and board members is to “brand” your company and its financial performance. The investors need to have an image, feeling, emotion, when they begin to review your company’s performance because you have branded the company in their mind. Examples of company branding are: the images and expectation people have in their minds of what their experience will be when they go to a Ritz Carlton hotel or are looking to buy a new Lexus.

Simply put, your brand is your promise to your investors and your board. Your brand is derived from who you are and why what you are doing today will drive continued success in the future. Your job is to set the image of why the company will be successful – please note that I said it is to set the “image”. The visuals in your presentation are extremely important – consider utilizing the graphic art of your marketing material in your investor and board presentations so that you convey a consistent image to the reader.

Your brand has to be what you have done and what you plan to do. You have to be confident that once you have given an investor an image of your company you will live up to that image. Most investors are going to watch you for a few months or quarters and when your results are consistent with your brand then they will support the company. The key to establishing a brand is clarity about what you plan to do and the execution of the plan so that you deliver on the promise even if the promise is not the top performance of your peer group.

Do not say you are a growth company if you are not; say you are a company that is positioned to become a growth company by doing A, B and C. Then give clear and easy to understand updates on A, B, and C as you make progress. Too often companies make statements that are consistent with what the market is rewarding despite the fact that the company cannot deliver on the promise.

While working many years at GE we used to say that we needed to sweat the details until we understood the truth and then develop a W3 (who, what, when) plan to get to our desired destination. Effective communication to investors and the board requires understanding the truth about your company, telling the truth and then telling the story in a clear fashion about the W3 plan to get to your destination with details about the required investment dollars and timing of payback. Be conservative, you are rewarded for raising or beating your forecast but severely punished for missing it even if by a small amount.

Keep your message clear and simple

The KISS principle is effective because it works. Too often people try to make investors experts about their company and what they really need is to be prepared to tell their boss or investment committee why they should be buying your stock. You have to prepare these investors to sell why they think you are a good investment. Give your investor audience 3 or 4 key points on why your promise will be realized so they will use those same points to explain to others why they are supporting the company. For each point you have to provide “proof” that what you are saying is true by showing historical data and indicators that imply you will have continued success. One of the key points for Greatbatch is that we promise to sustain our organic growth at 5% or higher. To prove or support this point we show how we do business with all of the top OEM for the medical device market, our growing portfolio of intellectual property that help our OEM partners take market share and that our OEM customers have entered into long term contracts with us.

At the beginning of your presentation have an executive summary that is straight to the point about what you are going to present and what conclusion you want the reader to have. Make your initial chart so simple that it is impossible to misunderstand what you want to say. If you want to say that you think your margins will increase then put a header at the top of the page that says, “we expect margins to increase approximately 50 bps for fiscal year 2014”. Then at the bottom of the page say the same thing except use your “proof points”. It may be something like this, “Increased volume is driving margin expansion”. When I have experts from communication and or the board review our investor presentation they often want to make edits because I am repetitive. It is good to be repetitive because you know that investors are covering many companies and they are speed reading your documents so being repetitive is good.

Do not confuse your investors, keep it simple – if you need to reconcile data, then put it in the appendix so that the reader who wants to tie out something can but everyone else can skip the details if they like. Inform your investor base that you have posted supplemental data to give them an explanation of things they need to reconcile. This will increase the likelihood of them waiting until they review the posted data to ask questions and now you can communicate to them one on one rather than have everyone at a conference or earnings call listening to a detailed and potentially confusing explanation.

As you draft your presentations you should consider taking some of the details off of your charts so that people do not miss the message you are trying to convey. As an example, if you are providing a graph, you might show how each year has improved without putting the numbers for each year on the graph. All you need to do is show the first and last year and indicate the increase is 14% CAGR. Again put the details in the appendix for those that want it.

Please keep in mind that showing only your company’s history will not suffice. You have to show current data or indicators that position you to continue your success. Once you show this data you have to be able to report on your progress each quarter in a simple fashion. If you cannot report on the indicator in a timely basis each quarter and/or you do not have a forecast for the indicator for the next year or so then I suggest you work on your reporting/forecasting system before you give this data externally.

In other words, the content of your presentation has to be what you know you will execute on, can report on in a timely basis and can be easily linked to why you will continue to have success and delivered it in a fashion that your audience can summarize and repeat to others.

Be consistent and repetitious

Think ahead. When you are informing your investors and board about the current period performance, position them to expect the next period update and make sure your explanation of variance drivers from period to period tie back to the brand or promise that you have set in everyone’s mind.

Here is an example of thinking ahead. Let’s say you are explaining the current quarter organic growth and sales are up 13% for the quarter. However you know the next quarter organic growth will be around 7%. You may want to show your investor and board a rolling four quarter organic growth of 5% so that they are not surprised and are supportive of the stock when the next quarter growth is 7% because you are raising the rolling four quarter average instead of being concerned because you are below the previous quarter growth rate. If you think ahead you are planting the idea of rolling quarters as the best way to evaluate your company rather than hype the double digit growth. If you wait until the next quarter to introduce the rolling four quarter concept it seems like you are making an “excuse” for the decline in sales rather than delivering on a promise of increasing the sales growth.

Again, as you explain the current period, you need to position people for what to come, especially if the next period will be below the current period performance. We had a product line that was growing about 20% per year but was experiencing declining margins so we began the process of repositioning the product line by walking away from some low-margin repeat business. We told our investors the truth about how we like the upside opportunities in the market place and what areas we could excel at and why. We also told them that we would have very little organic growth for this product line as we focused on higher-value lower volume segment of the market place. We then clearly confirmed that we still will execute on our promise of at least 5% organic growth. Confirming that the first time we run into a problem we will not move off of our promise.

The key points of not to surprise or confuse, to be clear and simple as well as repetitive and consistent hold true for your board of directors as well. Therefore every chair of a committee for the Board should get a call from either the CEO or one of his/her direct reports to update them, in clear detail, about the performance of the company and what to expect at the next Committee meeting and Board meeting. It allows you to get their questions/concerns answered in advance of the meeting. There is nothing better than adding some additional analysis they request because you are gaining their support when the data supports your recommendation. This is a win-win outcome.

If your company can execute, without ever surprising or confusing anyone, on the promise then you have branded your company for the right audience of investors, which will prepare them to articulate their support for your company and maximize your company’s enterprise value – easier said than done – good luck!

By Michael Dinkins and Maureen Maholic

Michael will be presenting on this topic at the 5th annual Life Science Financial Forum on June 20th in Raleigh-Durham.

Michael Dinkins holds the position of Executive Vice President & Chief Financial Officer Greatbatch Inc. Prior to joining Greatbatch, he served as Chief Financial Officer or CEO for three different public companies, held several senior financial positions at General Electric and graduated with honors from GE’s Financial Management Program. In addition he has served on the board of directors for three public companies. He graduated from Michigan State University and currently serves as a board member for the Collin County, Texas Boys & Girls Clubs and Feed the Children charity.

Maureen Maholic serves as Mr. Dinkins assistant at Greatbatch, Inc.. Prior to joining Greatbatch she served as assistant to other senior executives, facilitated money management training and taught high school. She holds a B.A. from Waynesburg University in French, Political Science and Secondary Education.

]]>http://execrank.com/beyond-numbers/feed/0Driving an Effective Talent Management Strategyhttp://execrank.com/driving-effective-talent-management-strategy/
http://execrank.com/driving-effective-talent-management-strategy/#commentsTue, 23 Sep 2014 17:41:17 +0000/?p=6584“Putting the Right Person in the Right Job at the Right […]

Putting together an effective Talent Management strategy is something that many Human Resources leaders find challenging. There are a number of reasons. One would think that Business leaders would understand the importance of ensuring the appropriate people are driving their organizations to an optimal level of performance. While this is intellectually understood, however, it takes a particular level of thought and discipline to implement.

The dilemma for the Human Resources Executive is three-fold: developing the talent management strategy, driving the understanding through the HR professionals to understand and support it, and influencing business leaders to drive it through their respective organizations.

The key to implementing a successful talent management strategy for Human Resources Leaders lies in the ability to do all three of these things well and calls on a skill set that pulls from many different areas.

Developing the Talent Management Strategy

The first thing necessary in developing a talent management strategy is ensuring that there is an established business strategy. That business strategy is the foundational element that determines the type of talent needed in the organization.

Secondly, as HR Leaders, we have to dissect the business strategy and extrapolate the critical organizational capabilities needed to drive future growth. Organizational capabilities signal both internally and externally what the enterprise requires and values in its business.

Third, once the organizational capabilities have been defined, they then need to be translated into key roles within the organization. The HR Leader must determine the types of roles needed to drive the various capabilities within the organization. These critical roles are the ones you will focus on through differentiated investments when sourcing talent for the roles, while transitioning talent into the roles and while positioning talent to develop and hopefully thrive in the roles.

Fourth, we outline the individual competencies needed for successful candidates for the critical roles. Are broader competencies or more in-depth functional competencies needed to do the role well? What types of experience should any individual have to ensure they are successful in the role?

Once individual competencies have been identified for the critical roles, then we have to turn our focus as HR Leaders to the employee population. We have to assess the employee base and determine if we have the key talent readily available to fill the critical roles. After this is done, the talent planning comes into play. If you have employees readily available to fill these roles, then you are at an advantage and will probably be the envy of all your peers. Most organizations aren’t that lucky. Talent planning involves assessing your workforce to determine one of a few things: Do I have employees who are ready to fill the roles? Do I have key talent that can eventually be ready to take on the critical roles? Do we lack the talent internally? Do I have to go to the outside and staff the roles externally? Answering these questions forms the elements of a talent management strategy which is visionary and action-oriented at the same time.

Driving the understanding through the HR team:

Once the talent strategy has been developed, members of the HR team will need to understand it and put the appropriate HR enablers in place to ensure that the strategy is implemented effectively. HR Business Partners and COE Specialists will play an important role in developing the appropriate plans

Training and Development Specialists will need to develop the learning plan to build capabilities within the existing employee population.

Staffing and Recruiting Specialists will need to put together sourcing plans to bring external talent with the capabilities needed into the organization

Talent Specialists will need to ensure that developmental and performance planning processes are in place so individuals can continue to enhance their capabilities and job performance

Compensation Specialists will need to ensure that there is a proper reward and recognition plan in place to incent the appropriate performance and behaviors

HR Business Partners will need to coach and counsel line leaders and middle managers to ensure they develop their key talent through all of the HR processes and tools available to them

Influencing business leaders to drive the Talent Management Strategy through the organizations

It’s not enough to have developed the talent management strategy and to have a team of Human Resources professionals who have put the enablers in place to support the talent strategy. If the business leaders do not embrace the talent management strategy , then it will not be implemented.

Influencing skills are critical for the Human Resources leader. The business leaders must understand the importance of the talent management strategy. In order for HR leaders to be successful in their areas of influence, they must be able to speak the language of the business leader. Strong business acumen is critical to the success of any HR leader. Understanding how to show the business leader how the talent management strategy will impact their bottom line and grow their business is imperative.

As HR leaders, we have to be more than HR practitioners who know HR processes, policies and procedures. We must understand the businesses we support. We must be business leaders whose area of functional expertise is “people strategies”. I like to say that we have to know what keeps our business leaders up at night. We must understand the key challenges they face as business leaders and then apply the talent management plan to overcome those challenges.

As an HR leader, you must be able to help the business leader solve his problem and drive growth by determining and implementing the appropriate HR intervention. Then you, like any other functional leader, can consider your partnership with the business leader a success.

In summary, implementing an effective talent management strategy from end to end is a key foundational element to driving strong business growth and creates a competitive advantage for your organization.

Celeste Warren is Vice President, Human Resources for Merck’s Manufacturing & Global Labor Relations Center of Excellence. In this role, she has responsibility for the strategic and operational Human Resources support of Merck’s global Manufacturing Division as well as Merck’s Global Labor Relations Center of Excellence. The Merck Manufacturing Division (MMD) operates worldwide, with ~27,000 employees working to form an integrated, interdependent network to supply Merck products to customers in 140 countries.

The executive leadership of an organization of any size is constantly concerned with its performance levels. Certainly, the Seven Elements of High Performance™ provides guidance, yet management often has their hands full with day-to-day operations. While senior executives should be focused on the long-term, it is often too easy to become bogged down and distracted by the daily operations of the organization. This is where a good Board of Directors can come into play, to help the Shareholders of the organization ensure that the managers keep the organization focused on the long-term.

While it could be argued that a Board of Directors is more related to management, as they do have the highest authority in most organizations, the fact that they have power over managers tends to negate placing them in the Management Constituency. Likewise, it could be argued that they might be a Strategic Partner, but while board members, much like consultants, might be “hired” from outside the organization, their power within the organization also eliminates this as an option. Simply put, the board members are the direct representatives of the Shareholders, and quite often include either the owners of the organization for smaller organizations, or the direct employees of the owners. They may also be elected by the owners of larger, publicly-traded organizations.

Having a Board of Directors is often a luxury for smaller organizations, but it can prove invaluable in helping the organization grow and become more stable. Owners are often experts in the area their organizations operate in, yet the technical skills needed for the daily and long-term operations of the organization may go far beyond their areas of expertise. Marketing, branding, personnel issues and more all come into play in running a successful organization. Often, a board member can bring expertise in one or more of these areas, helping to provide much-needed guidance, or perhaps the contacts and connections to penetrate a given market.

As organizations become large enough to have a Board of Directors, owners often ask people that they personally know to help out and serve, sometimes limiting the diversity of thought that they could have on their Board, which also limits their opportunities. Of course, the “hot” or “in” thing today is “Board Diversity,” so off they go to find a “token person of diversity” to fill a spot. It doesn’t matter what diversity they might represent, as long as they are either black, Hispanic, Asian, female, or young, which seems to be what is currently in vogue. Of course, if the owner and other Board members are younger black females, then an older white male might be the choice, as long as they are “different” from the rest of the Board and owners. This strategy rarely leads to high levels of Board or organizational performance, as the “token” person rarely has an impact on the organization.

Let’s take a better look at how to approach Board Diversity, using the Seven Elements of High Performance™ research, so that the Board of Directors has a greater impact on sustainable organizational performance.

The Strength of Diversity

One of my Cherokee teachers shared with me that everything exists within a Circle. While each of us may be located in many places throughout the Circle, the Truth lies at the Center of the Circle. Because none of us are standing exactly where the other one is, our views of the Truth are different. We see something slightly differently than the person standing next to us, although fairly similar. Our view is quite different from that of someone far to the left or right, or across the circle from us.

Our position in the Circle comes from many things. Our race, ethnicity, gender and age all contribute. The things we experienced growing up, our personality, and a host of other things round out the impacts that make us a unique individual. Despite being unique individuals, however, many of our experiences combine to group us in an area of the Circle with others who have had similar experiences, even though the individuals may be glaringly different. For example, two middle aged, white people who grew up in the same neighborhood of the same town might be more similar than different, despite the fact that one is a male and the other female. On the other hand, perhaps there are two younger black males, who also grew up in the same neighborhood, but this neighborhood was very affluent and mostly white, and the two black males attended private preparatory schools and universities. They won’t be very diverse in thought from the white males on the board who also grew up in similar neighborhoods and attended similar schools.

When we are all looking at things from the same or similar positions, we tend to see the same things and miss the obvious that might be seen if we looked at it from another direction. The whole purpose of having diversity on the board is to get a variety of points of view and to see things from those different directions. The more the board members are spread throughout the Circle the wider the variety of perspectives we gain.

This means that we have to move beyond the obvious diversity of race, gender, and age, and on to looking for people with that variety of experiences needed to put them in different parts of the Circle. Of course, this will mean that we will get people of different races, genders and ages. It gives us, however, a far richer impact on our decisions by having people from a true variety of backgrounds.

Having this great variety of points of view, a wealth of diversity of expertise, experiences, and opinions is for naught if we can’t put it to use. This reminds me of the old story of several blind people being put in a room with an elephant. One person touches a leg and describes it as a trunk of a tree, while another touches the trunk of the elephant and says, “No, it is a fire hose.” Another touches the ear and says that it is a fan, while another touches the tail and says it is a whip. The fifth touches the belly from underneath the elephant and says that it is a sagging tent. Each continues to argue their discovery from their point of view. Who is right and who is wrong?

Each person is seeing the “Truth” from a different point of view, yet none of them have the entire picture because of their limited ability to see the entire picture. We often encounter the same problems within our organizations. If we could see everything and know the future, then making decisions about our business would be very easy, indeed. We don’t usually have a full picture and we never know the future. What does give us an advantage m is having that diversity of viewpoints that we discussed previously. This diversity of views, however, does us no good if we can’t communicate about what we are seeing, combine our views, and come up with the “big picture”.

Diversity is nothing without communication. If a board can’t discuss problems, issues, and ideas, in a manner that is respectful, candid, and focused, then it doesn’t matter whether there are different points of view, as the board will not become an asset to the organization.

How do we achieve inclusion for everyone on the Board of Directors? How do we ensure that each member is listened to, his or her input valued, and that we get the benefit of his or her unique point of view? Let’s take a look at the Seven Elements of High Performance™ for some clues. Just as we found that a high-performing senior leadership team must focus on three key elements to perform, we find that a high-performance Board of Directors must also focus on three key elements, although slightly different than those the senior executive team must focus on. The elements of trust, strengths and vision combine to help a board become highly valuable to any organization. These three elements allow the board to come together as a single, supportive force for the organization, while still having different viewpoints. It allows for the ability to communicate the different viewpoints, while ensuring long-term focus for the organization.

Trust

As usual, when creating exceptional organizations, we begin with trust. Trust is the foundation for all positive relationships, including the relationships between board members, and between the board and the Shareholders and Management of the organization. It begins with accepting each other for the experiences and expertise that each person brings to the table — recognizing that each person is unique and valuable. This lays the foundation for everyone to be open with each other and share their ideas, concerns, and insights. It also lays the foundation for everyone to be straightforward with each other, and say what needs to be said in a direct and honest manner. Being open and straightforward combine to create the condition called “candor,” which Jack Welch so often talks about as being necessary in any organization. But this candor is balanced with the fact that each person is accepting of the others on the board. This means that ideas and issues are argued, but arguments are never about people or their personalities. Even if things do get a bit heated, the arguments are always carried out in a respectful manner.

Finally, when we are accepting, open and straightforward with each other, it then leads us to the ability to be reliable. This means that we do what we say we were going to do and follow through with our commitments. It also means that we focus on providing a high quality result. Doing what we say we are going to do is what most people most commonly think of when they think of what it means to trust someone. As we now know, this is but the end result of many other behaviors that help us reach that end point of being reliable.

These Four Behaviors that Build Trust™ provide the foundation for a diverse board to interact and get along with each other. It helps to ensure that the diversity of each person on the board is leveraged and put to use. When boards have high levels of trust, then they communicate better, cut through the fluff and get to issues more quickly, identify problems and find solutions much more quickly. They also have a higher level of commitment to those solutions, providing quicker results and a huge impact on the organization’s performance.

Focus on Strengths

One of the things that allow members of the organization to be accepting of each other is to ensure that members are carefully chosen for their strengths. We all have strengths, something that we know a lot about or that we do well. These strengths don’t necessarily have to be what you do as a vocation, such as being a financial advisor or HR manager, but something that is related to the needs of the organization. Perhaps a candidate for a surfboard company is a financial executive but also an avid surfer. This person might provide insight into reaching a new class of customers (executives who surf) or features that customers might want. Keep in mind that the members of the Board of Advisors or Directors are not necessarily chosen for their technical, day-to-day operational expertise, but rather for their broader knowledge and experience that will allow them to help guide the organization for the long-term.

Of course, if a board member can help out with solving an immediate tactical/technical problem, then they are that much more valuable. Do not, however, use this as your sole determinant for choosing a board member. By doing so, that member’s expertise will soon no longer be needed, and you will simply be going through board members as you move from crisis to crisis. Remember, your board is there to provide advice for dealing with unforeseen issues, but primarily they are there to help you and any other Shareholders keep the organization on track for the future.

Another thing to keep in mind about strengths is that the fact that someone has been doing something for a long time doesn’t mean that what they have been doing is necessarily a strength. I had another American Indian teacher tell me that the fact that someone is old doesn’t make them an elder; sometimes that person is just an old person. By the same token, just the fact that a board candidate has worked in finance and has achieved a high position in an organization doesn’t mean that person is an expert in finance. It might simply mean that they are good at only the basics and that’s all their organization has needed; your organization might need more. The same goes for HR. Most HR managers know how to deal with the day-to-day transactions of HR, but very few really understand the impact that HR can have on an organization and how to help the organization release all of the energy and power of its Human Resources. These people, the long-term practitioners that are not experts, might be able to help an organization find ways to do things differently, but they won’t help the organization to do the different things that are needed in order to allow it to become an exceptional organization.

The best organizations don’t just do things differently; they do different things!

Finally, make sure that every board member understands the strengths that they are bringing to the table and why they were chosen, and ensure that they and the other board members understand why each member was selected. By helping the members understand each other’s strengths and value, you are helping to create acceptance by and for each member.

Unfortunately, the approach most organizations take is much more similar to a situation that I personally have knowledge of. It involved a smaller, non-profit organization that happened to operate internationally, that was at a crossroads in its growth. The director of the organization recruited a person who had a vast amount of knowledge about the industry they were working in, including some very specific technical knowledge needed to solve several problems they were facing. Unfortunately, the rest of the board was not made aware of this person’s vast expertise, knowledge and experience. As the new board member brought up issues that the organization needed to address, there was always resistance from the rest of the members. These were the exact situations the member had discussed with the director when the new member was recruited, and were the very reason that person was brought on board to solve. The new member was very confused by the animosity that they faced from the rest of the board members.

Dissention grew on the board, and finally the new member resigned, leaving the organization with many, many issues still not resolved. The primary reason the person was brought on the board was to bring specific expertise and help provide guidance to solve those issues. Unfortunately, the director of the organization never shared with the other board members the reason for bringing the new member on board, what that member’s strengths were, and how the director saw that member helping the organization. As a result, acceptance was destroyed, and there was little open and straightforward communication happening. In fact, the communication that did occur was very unhealthy conflict resulting in most people shutting down. Issues were not resolved and problems were left unsolved.

As a result, the organization never really did overcome some of its obstacles, and to this day still has not achieved the potential that it could have achieved, had it dealt with the issues that it was facing. With trust and strengths lacking on the board, its members failed to challenge the organization and take it to higher levels of performance. Instead, the new board member had been marginalized by the rest of the board, perhaps precisely because they were different from the rest of the board, although these differences were beyond race or gender.

Clearly, strengths and trust are closely related, and the absence of either can eventually lead to the absence of both. Your challenge, when considering potential board members, is to clearly understand what strengths each person brings to the board, and, after choosing a new member, that you clearly communicate to that member and the board why you chose him or her to help guide the organization. This doesn’t mean that is the only area in which that member should have input, but when there are issues that need to be addressed, the board will know who to turn to in those areas to provide a greater degree of guidance. The board should never totally defer to these “experts,” however, but rather let them be the guides while each member is also participating. We must remember that even the experts don’t have all of the answers, which can often come from the simplest sources when properly guided.

Creating Alignment with Vision

Trust and strengths are the very foundation for creating diversity on your Board of Directors, but it doesn’t end there. Having a board that is richly diverse and that is communicating is still not complete. Diversity just for the sake of having different people will not help an organization increase its performance. What’s needed is for every person on the board to be focused on the key things that will result in an increase in performance for the organization. In other words, we need every person on the board, no matter how different they might be from each other, to not differ on their understanding and commitment to the vision of the organization; its aligned purpose, values, and goals.

The organization’s vision provides the focus for the board and the organization in everything that it does. The organization’s purpose is why it exists; its very essence and the reason why everyone is working in the organization. If a board member cannot support this purpose, then that member’s points of view will rarely, if ever, provide valuable insights, as everything that the organization is doing should be in support of this purpose. The purpose is the focus of the organization, not just the board, and each board member must embody that understanding and strive to help the organization accomplish it.

The organization’s goals are what the organization is going to do in order to accomplish that purpose. In this situation, these goals tend to be both singular and broad; more strategic in nature and not tactical. They fall in the Four Performance Areas: Relationships; Economics; Action-Ability; and Longevity. The board, along with management, becomes the keeper of these goals, especially those around Longevity. It is the board’s responsibility to ensure that the organization is here for the long-term and won’t disappear because of poor management practices. This means that it must provide the guidance to management about how to go about achieving the organization’s Goals.

This leads us to the values of the organization. These are how everyone in the organization is going to behave towards each other as they do their daily work to achieve the goals and accomplish the organization’s purpose. Values set the boundaries of behavior within the organization. It is the board’s responsibility to ensure that management is doing its part to ensure that the values are lived on a daily basis. It does no good for an organization to post its values on a wall and then never pay attention to them as everyone goes about their daily routines. After all, even Enron had some laudable values; unfortunately no one dared ensure that they live by them daily.

These three things, purpose, values, and goals, combine to create the vision of the organization. Every board member, no matter how diverse they are, must be in agreement with the organization’s vision. If they are, then it will focus that diversity of individual thought, experience, and points of view into a more comprehensive and very powerful tool that can give any organization great insight to its problems and challenges, and maybe, just maybe, a tiny peek into the future.

The goal of any organization that utilizes a Board of Directors or Advisors is to find a diverse pool of people that can offer great insight to the organization, and then ensure that they all know and understand the organization’s vision, and can wholeheartedly support it. Whomever you get, you don’t want “yes” people. You want people who will challenge the board and the organization to take it to higher levels, but within the values of the organization and without sidetracking it from its purpose. This takes us back to having good communication on the board, and ensuring that everyone is being respectful and candid in their discussions. We have to ensure that every board member, regardless of background, is included and listened to, but that what they are sharing and the impact they are advocating will always advance the vision of the organization. Creating a Balance Between Diversity and Alignment

My American Indian teachers have consistently shared with me that the key to success is achieving balance in our endeavors. The same is true in achieving diversity in our Board of Directors. Yes, we want a variety of strengths; the experiences, physical differences, and points of view that will help give our organization an advantage to not only survive in the challenging business world, but to actually thrive and become one of those rare, exceptional organizations. Embracing diversity is essential to being able to meet the unknown challenges of the future. We never know whose experiences and viewpoints are going to help lead the organization to the solution to the next problem it might face. On the other hand, we also want the uniformity and consistency of focus that comes from having an aligned vision. The organization has a culture, and, if chosen carefully and built on a strong and well-crafted vision, that culture will help the organization become successful. The board must support that vision and the resulting culture, so each board member must fit with that culture.

Utilizing the elements of trust and strengths will help you build diversity on your board, and focusing on the organization’s vision can ensure alignment. Finding that balance between diversity and alignment is essential. Once you do, then you will have a board that can effectively discuss issues, argue points, and solve problems, while keeping the organization focused on where it is going, achieving its goals, and accomplishing the purpose of the organization.

Diversity and uniformity – the opposites that must be prevalent at the same time, would seem a contradictory approach to creating a highly effective Board of Directors. While sounding impossible, it is, in fact, very easy to achieve if we just apply the three key elements from the Seven Elements of High Performance™ essential to creating a diverse, high performing Board of Directors for your organization. By building trust, focusing on strengths, and aligning the vision, your organization can have a highly diverse and very effective Board of Directors to help guide it to rise above mediocrity and become one of the few exceptional organizations that achieve great things.

Gary Lear is a researcher, bestselling author, speaker, and expert on organizational performance, leadership, and employee engagement. He is the author of the bestselling book “Leadership Lessons from the Medicine Wheel: the Seven Elements of High Performance.” He is also the founder, President & CEO of Resource Development Systems, LLC, an organizational performance consulting firm that supports continued research on the Seven Elements of High Performance™ and utilizes them to help its clients become exceptional by becoming masters at Managing the Human Side of Business℠.

Beginning his groundbreaking research in 2002, Gary Lear went on to discover the Seven Elements of High Performance™; those seven things that combine to allow organizations to rise above mediocrity and become exceptional. When Mr. Lear wrote about it in his initial whitepaper, The Dynamics of High Performing Organizations, his new model caught the eye of the US Navy, resulting in their adoption of the model as part of all of their leadership programs at the Center for Naval Leadership. With people as the central element, Gary has often written about and worked with organizations to understand and leverage the Manager – Employee – Customer relationship, three of the seven constituencies. He now turns his attention to a fourth and crucial constituency, Shareholders, without whom there would be no organization.

The subject of diversity in the corporate boardroom has been picking up pace increasingly over the past few years. The 2008 tsunami that hit the global economy has certainly amplified this discussion and shed greater light on it, especially from the perspective of compliance, risk-taking, governance, transparency and responsibility.

As one conglomerate after the other tumbled, more questions were raised about the level of aggressiveness and risk taken by those companies’ executives, and, more importantly, about the role played by their respective board members in keeping those executives in check. One of the most resonating observations presented, was on the subject of homogeneity vs. diversity in the profiles of the members of a Board of Directors.

Like any healthy debate, the discussion sparked passionate advocacy from both sides of the fence.

From one side, there are those who believe that the make-up of corporate boards had nothing to do with the ill fortunes faced in the years since the crisis. They hold that the misdeeds of the few should not be considered, other than an as exception to the rule and that employing diligence to enforce corporate governance has nothing to do with a board member’s gender, ethnicity or experience.

In proving a point, this group cites the universal understanding that the role of a “Board of Directors” is working in unison with the CEOs and guiding their efforts to maximize shareholder value. As such, it becomes increasingly important that a CEO is surrounded with a homogenous board of like-minded individuals with shared interests. That would allow for a greater, deeper interaction among the members as well as between the membership and the CEO. This will obviously make the decision-making process more agile, allow greater alignment of vision and foster a healthier working environment.

On the other hand, the protagonists of diversity have been vehemently criticizing the poor decision-making process that characterized most CEOs of the failed corporations and the unveiling of cover-ups received by Executives from their like-minded boards. This group fears that the absence of a deep structural reform in the make-up of these boards will surely keep corporations vulnerable, and any tsunami-level economic shock will mean a repeat of the massive tax-payer bail outs of 2009.

In garnering greater standing and credibility, this group has been focusing their efforts on the particular issue of gross misrepresentation of women in boards and the gender imbalance across the wider spectrum of executive leadership within organizations.

One of the strong advocates in pushing this case is ”Catalyst” (www.catalyst.org) – a nonprofit organization whose stated mission is “to expand opportunities for women and business”.

”Catalyst” published a report in 2011 summarizing findings of analyses they did of Fortune 500 companies (from 2004 to 2008). The underlying premise “…contends that companies that achieve diversity and manage it well attain better financial results, on average, than other companies”.

To prove the argument, ”Catalyst” used three measures to examine financial performance: return on sales (ROS), return on invested capital (ROIC) and return on equity (ROE). The report has extensive findings, but in a nutshell demonstrates that companies with the most women board directors outperform those with the least by 16% on ROS and by 26% on ROIC. Moreover, the report concludes that “…companies with sustained high representation of WBD, defined as those with three or more women board directors in at least four of five years, significantly outperformed those with sustained low representation by 84% on ROS, by 60% on ROIC, and by 46% on ROE. (The full report with all the findings can be downloaded from their knowledge center website: http://catalyst.org/knowledge/bottom-line-corporate-performance-and-womens-representation-boards-20042008

These findings are not isolated, single occurrences. Fortunately, the public domain features loads of studies, expert views and opinion pieces on the business merits of diversifying membership in boards of directors – and the reference is to diversity in its wider context rather than just gender. In the end, adding to the empirical evidence, there’s an intuitive argument to having boards that represent the complete spectrum of stakeholders and the community at large.

So, if the argument for board diversity makes business sense, why is it still a subject of debate and why is it not widely adopted yet?

For one, those in favor of diversity are doing the adoption process a disfavor by pushing support for a proposed legislation that enforces gender quotas on companies’ boards. Policy has no business interfering with a company’s internal operation. This will not help the constituencies that it set out to help in the first place and will surely disrupt any organizations’ quest for meritocracy-based advancement.

The real issue today is not in the absence of legislation, but rather in the absence of a mature marketplace that acts as a credible platform connecting distinguished individuals who could stand as potential board members and the companies who are searching for them. Let’s face it; today, nominating committees are as guilty as the CEOs in falling back on safe options when searching for board appointments – but beyond the appeal of going for the usual suspects, potential candidates are also guilty by not making themselves (and their skills) visible enough.

Change is inevitable, but with disruption knocking on everyone’s door, this has to be a smooth evolution and not a mandated revolution.

One way to solve for this is to enlist the help of the Enablers; those intermediate players who have developed credible skills and knowledge of the dynamics of corporate boards and the criteria for success in these assignments. These companies have a great role to play in prepping internal candidates, providing them with the necessary coaching and grooming to be ready for the real deal. They’re also pivotal in providing access to their own database of external candidates who would have been chosen through a careful process of screening and evaluation.

To this end, the responsibility lies with decision makers and nominating committees to trust and depend on those Enablers to offer a gateway to new opportunities. For the time being, Enablers will have to be the bridge; the rest is simply a question of time!

Chadi Kandil is the CEO of the MENA region at OMD, and an executive with 20 years of professional experience across the marketing, media and communication fields.

]]>About the Author: Jeff Stout, President of BlueSky Professional Services Group, LLC

Prior to forming BlueSky, Jeff spent 18 years as a Partner in the Financial Services Practice of Accenture. Jeff started BlueSky in 2006 after three former clients all told him, “Jeff, you should start your own firm.” BlueSky has since grown into a thriving company with an impressive team and client roster. Outside of work, Jeff is an avid runner and has completed the Los Angeles Marathon three times as well as dozen half marathons. He enjoys travel and his favorite spots are Telluride, Carmel and Kauai. His real passion is vintage automobiles and racing. He has competed in the 2003 La Carrera Panamerica in Mexico and the Rolex Monterey Motorsports Reunion in Laguna Seca. He likes life at 145mph.

How the lessons of Ocean’s Eleven can help you recruit an amazing team of executives

Danny Ocean was a man with a dream. That dream involved hitting three Las Vegas casinos and walking away with $150 million in cash. In order to bring that dream to fruition, Danny would need to overcome significant obstacles. He would need to find a way to infiltrate a public space riddled with surveillance cameras, elude an army of highly trained security personnel and gain entry to a heavily protected vault. Some people live for impossible challenges. Danny Ocean was one such person.

So how did Danny do it? The challenge he faced was complicated, but the answer was simple. He recruited a team of highly trained specialists. Once assembled, Danny’s team had all of the necessary ingredients to convert the impossible into the possible. They worked together to pull off the Vegas heist of the century. At this point, you might be wondering what the plot of the movie Ocean’s Eleven has to do with recruiting an executive board….

Your Board of Directors is also a hand-picked team that must overcome significant challenges, navigate difficult situations and work together when needed to make the impossible possible. You may not need to recruit a demolitions expert, acrobat, or pick-pocket to fill your empty boardroom chairs or achieve your business goals (at least I hope not). But you do need a team that possesses unique and complementary skills, meaning each member can function as a subject matter expert on his or her own or combine their individual expertise with the collective knowledge of the team to pull off the business equivalent of the heist of the century.

With that in mind, here are four ways you can apply Danny’s innovative approach to recruiting your own executive board dream team.

Think Outside the Box

Why it’s important: The boardroom is a venue steeped in tradition. However, not all of that tradition is valuable and blindly following historical precedent will not guarantee success. Like Danny Ocean, stop and think about what youneed to accomplish. And use that knowledge to determine who you need to make it happen. Take an outside-the-box look at the following areas.

Age Matters: The average age of a board member across all industries is 63. For relatively new companies, especially those in emerging industries, recruit members who are younger and more closely associated with and involved in the nature of your business. Back on My Feet is an NPO with a mission to use running to help homeless members of the community change their lives. Given this organizational goal, it makes sense to recruit younger, physically active board members who embrace the value of running and fitness. Look at your own business and decide what the target age range of your board should be rather than simply following tradition.

Passion Counts: Look for candidates who have a clear passion for your specific industry. That spark creates a level of personal investment and enthusiasm that can be missing in someone who doesn’t have a personal connection or interest in your company’s work. Recognize that this passion can take many forms—passion for the product, or the customer; passion for the industry or its culture; passion for innovation or achieving excellence. Each expression of this passion has value. However, some are more valuable than others given the context of your current and future business goals. Choose wisely.

Context Differentiates: Not all experiences are created equal. A gardener and a surgeon are alike in that they both use sharp instruments. But you wouldn’t call the guy who trims your trees when you need knee surgery. Likewise, a veteran Kodak executive will not necessarily be a good fit on the board of Instagram. Yes, both companies are driven by photographs but in completely different ways. Look for candidates who possess practical, contextual knowledge within your specific industry or who have demonstrated and focused experience taking on the specific challenges your organization will face down the road. Context is key.

Embrace Diversity

Why it’s important: A board comprised of people who are too alike can lead to a myopic point of view and stagnant solutions. Diversity—including age, experience, perspective, and skill sets—is critical to create a well-rounded board that can take on any challenge. Bring the right level of diversity to your board with these tips.

Build the Foundation: At the most basic level, your board needs to be made up of people with skills in Finance, Corporate Risk, Human Resources & Human Capital and Marketing/Digital Marketing. Be sure you’ve covered this fundamental diversity. But don’t stop there.

Create Depth: Expand on the foundational skill sets with savvy executives who also possess practical skills and experiences. For instance, if you are a technology-driven company, having one or more board members whose resume includes leading and managing teams of developers—or even better, experience writing code themselves—would be beneficial. Look for candidates who can bring the necessary business skills in addition to practical knowledge to build a board with depth and agility.

Ensure Alignment: Diversity is important, but it is equally important to define what that means. Effective diversity requires bringing together people with different and complementary points of view that will open up new perspectives and possibilities. As with Danny’s approach, this builds a team that has diversity but retains the ability to work together towards a common cause. In summary, look for two things. First, ensure that each board member can offer a unique perspective. Then, ensure that each board member is fully aligned with the CEO’s overall vision and strategy. Don’t settle for anything less than both.

Eliminate Egos

Why it’s important: Is that an 800 pound gorilla in the room? No, it’s just a board member’s ego making its presence known. Effective teams are built around cohesion, trust and mutual respect. An unending battle of egos between members of the board is not a challenge you want to undertake. Steer clear of it by finding executives who possess the following traits:

Cultural Compatibility: Look for board members who have shared values, complementary talents, and a willingness to do what it takes to achieve and exceed business objectives. This cultural fit is something that is often mentioned when hiring new employees but it applies to recruiting board members as well. This sense of simpatico within your board will go a long way toward creating group cohesion and fostering team work.

Conflict Resolution: Let’s face it, conflict is a part of any group endeavor. To think otherwise is to dismiss the reality of human nature. An over-inflated ego often prevents the owner from taking a step back and looking for ways to reach a constructive resolution when conflict rears its head. Pepper your team with individuals who bring strength of character, rather than forceful and distracting egos, to the board room.

Transparency: Trust is a key ingredient in teamwork. Those who wield their egos like battle axes are often driven by personal agendas that they have chosen not to share with the rest of the team. Transparency and clarity are signs of people who have nothing to hide and whose interest in joining your board reflects a desire to serve the interests of the company rather than their own.

Seek Out Visionaries

Why it’s important: After recruiting his specialists, Danny revealed the full scope of the heist to his team. As they worked through each step of the plan, individuals were able to identify hidden challenges that Danny hadn’t considered and envision better ways to tackle problems. As a result, they improved the likelihood of a successful outcome. Follow Danny’s lead by seeking out visionaries for your board who can do the following:

Think Differently: This is one is an amalgamation of many different qualities—creativity, curiosity, insight, conviction, confidence and persistence to name a few. While it might be challenging to define, it’s clear and obvious to all when you meet someone who thinks differently. Apple launched its “Think Different” campaign on the heels of a disastrous run that found the company teetering on the edge of bankruptcy or takeover. This situation was, at least in part, the product of uninspired executive leadership. The ‘Think Different’ mantra rekindled the fire of Apple’s innovative spirit. Was it the campaign—the words—that sparked Apple to greatness? Not really. It was their new CEO, Steve Jobs, Apple’s new board of directors, and thousands of employees who brought the words to life. Look for board members who possess that ability to think differently. The success of your business depends on it.

Anticipate Opportunity: A true visionary can pull together seemingly disparate bits and pieces of information to anticipate future opportunities. This skill does not require reading tea leaves or consulting the Oracle of Delphi. Instead, it involves the ability to understand the past and link those lessons to current trends and future developments. Look for executives who have a vision of the future based on knowledge, logic and expertise and be ready to put that vision into play when opportunity comes knocking.

Imagine the Unimaginable: This is not about running around constantly muttering “The sky is falling.” Rather, it’s about identifying potentially negative outcomes and having the presence of mind to identify a constructive response in advance, even if the possibility of that outcome seems remote. For example, Target struggled to respond effectively to security breaches that resulted in the exposure of millions of its customers’ credit card information. Why? Was Target so confident in its security protocols that it decided a contingency plan was unnecessary? Learn from their mistakes. Recruit board members who can plan for the best while also preparing for the worst.

Running a successful business and planning the Las Vegas heist of the century are clearly very different objectives, but the roads to success are remarkably similar. They start with recruiting the right people. Danny understood this and created a team with the skills, experience and personalities needed to overcome every obstacle. In Las Vegas terms, he stacked the deck in his favor and assembled a winning hand. A line from the movie sums up his approach “Cause the house always wins. Play long enough, you never change the stakes. The house takes you. Unless, when that perfect hand comes along, you bet and you bet big, then you take the house.” Maybe it’s time to bring a little Vegas thinking to your boardroom?